AVALON HOLDINGS CORP

Line of Credit Agreement

On May 31, 2018, Avalon entered into a business loan agreement with Wesbanco Bank (formerly Premier Bank), (the “Line of Credit Agreement”) which provides for a line of credit of up to $5.0 million. On September 24, 2025, the Company amended the Line of Credit Agreement to extend the maturity date to July 31, 2027. Under the Line of Credit Agreement, borrowings in excess of $1.0 million are subject to a borrowing base which is calculated based off a specific level of eligible accounts receivable of the waste management business as defined in the agreement.

At December 31, 2025 and 2024, approximately $3.2 million was outstanding under the Line of Credit Agreement. At December 31, 2025 and 2024, approximately $1.8 million, was available under the Line of Credit Agreement. Outstanding borrowings under the Line of Credit Agreement bear interest at Prime Rate plus .25%. At December 31, 2025, the interest rate on the Line of Credit Agreement was 7.00%.

Borrowings under the Line of Credit Agreement are secured by certain business assets of the Company including accounts receivable, inventory and equipment. The Line of Credit Agreement contains a Fixed Charge Coverage Ratio requirement of at least 1.20 tested on an annual basis on December 31 of each year. The Line of Credit Agreement also contains other nonfinancial covenants, customary representations, warranties and events of default. Avalon was in compliance with the Line of Credit Agreements covenants at December 31, 2025 and 2024.

During the years ended December 31, 2025 and 2024, the weighted average interest rate on all outstanding borrowings was 6.16% and 6.24%, respectively.